Study On The Rights Of Convertible Corporation Bonds Holder

Because of the special advantages of the convertible bonds, more and morecompanies make the convertible bonds the most important method of financing. Thenumber of the convertible bonds issued between2007and2010was63%of theseissued between1992and2007, while the whole amount of was1.78times of thatbefore2007. However, the convertible bonds did not issued smoothly in China. Thefundamental reason for this problem comes from the hindrances of the legal systemwhich lead to the lack of the protection of the benefits of the bonds holders.Thus the protection of the benefits of the bonds holders is a significant issue. Theeconomic interests of the bonds holders are rarely affected under the normal operationof the companies, whereas are vulnerable under some special disastrous cases whichtherefore deserves more attention and research. This article focuses on the protectionof the benefits of the bonds holder by analyzing the increase and decrease of thecapital, the sold of important asset, the separation and integration of corporationswhich are the events influence the interests of the bond holders significantly.This article starts with the explanation of the by explaining the principle andinterest claims, the conversion right, the right to know and the right of participate andthen analyzes the legal significance of the rights of the bonds holder, the status of theprotection of rights of the bonds holder under some unexpected circumstances. At lastthe author offers further suggestions on the enforcement of anti-dilution provision, theforbidden of mandatory convertibles, the establishment of the accountability, and theimprovement of the securities information disclosure system, of the convertible bondsCreditor’s Meeting System and of the convertible bonds trust system.